Peru and Brazil

Short cut to China

Completing the missing link

STANDING at a scenic vantage point, Silton Melo can see the small steamy town of Assis, in Brazil's far west, of which he is a councillor. Across the Acre river, reached by dugout canoe, lies Peru; to the left is Bolivia. But Mr Melo, like other Brazilian politicians all the way up to the president, Luiz Inácio Lula da Silva, sees more than just the Peruvian town of Iñapari when he looks out over the slow-moving muddy river. His vision stretches hundreds of kilometres to Peru's Pacific coast.

Last August, Lula and his Peruvian counterpart, Alejandro Toledo, met in Assis. They laid the first stone of a bridge across the river, and signed an agreement whereby Brazil will help pay to upgrade the 700 kilometres (440 miles) of road, much of it a rutted dirt track, between Iñapari and the coast. If all runs to schedule, by June 2006 an asphalt road will run directly from São Paulo to Lima—and, more importantly, from Brazil's soya-growing state of Mato Grosso to Peru's Pacific ports.

This great road link is not a new idea. Peru's government hacked a trail through the jungle to the border in 1965. In the 1970s, a military government bought a 700-metre suspension bridge from Austria to span the Madre de Dios, a mightier river than the Acre. But the steel girders for the bridge have remained in their boxes since arriving in Peru in 1978. They might have remained there for another quarter-century had Lula's government not shown enthusiasm for the project. It is putting up $420m of the $892m cost for the highway. For Peru, the road is expected to provide some 20,000 jobs, one way or another, during construction. Once open, officials hope it will attract business and more jobs to some of the country's poorest towns in the Andes and the jungle. They talk of a new export market opening up in Brazil for such products as paprika and artichokes.

Brazil's ambitions for the road are even grander. It already sends 18% of its exports to Asia, and that share is rising fast. China is lapping up Brazilian soyabeans and wood pulp, much of which is produced in the country's centre-west region. At present, these goods have to be carried to Atlantic ports or trucked across Argentina to Chile. The new road will provide a much shorter route. Officials expect a daily flow of some 400 40-tonne trucks from Brazil. This should encourage investment in Peru's inefficient and run-down ports.

In Assis, where a shopping centre is going up, Mr Melo predicts a bonanza as his town's status rises from end-of-the-line to border entrepôt. The only people who are not excited about the new road are environmentalists. Peru's Madre de Dios department is one of world's most bio-diverse areas, home to three national parks, a nature reserve and a reserve for jungle Indian peoples. Benigno Herrera, a leader of the Brazil-nut gatherers in the Tambopata reserve, fears that the trucks will be followed by settlers seeking to clear forest for soya and cattle. But, so far, such complaints have barely been noticed in the general euphoria over a project long dreamed of finally becoming reality.